Accounting of Linich

Papers considered: 1. Petition for Probate, as amended, by Susan Linich filed September 26, 2016. 2. Petition to Compel Delivery and Discovery of Property by Susan Linich filed September 19, 2017. 3. Petition for Judicial Settlement of Account, with schedules by Susan Linich filed March 9, 2021. 4. Verified Objections to Petition for Accounting by Dagon James filed July 6, 2021. 5. Affirmation in Support of Legal Services by Sarah B. Rebosa, Esq. filed August 24, 2021. 6. Memorandum of Law in Support of Petition for Judicial Settlement of Account by Andrew P. Nitkewicz, Esq. filed August 24, 2021. DECISION/ORDER This is a decision on an accounting in an estate described at length in this Court’s decision/order dated January 6, 2021, which granted probate to a July 2015 will. The decedent, known professionally as “Billy Name” was a photographer who chronicled Andy Warhol’s most productive years in The Factory, his studio/salon. In the final years of his life, the decedent hired an agent, Dagon James, to manage and market the reproduction of his iconic photographs. Ultimately the decedent named James as his sole beneficiary and executor under the July 2015 will, which was admitted to probate on James’ motion for summary judgment (hereinafter, the “2015 Will”). Probate of the 2015 Will had been challenged by decedent’s niece, Susan Linich, who was the proponent of an earlier will dated March 11, 2011 (“2011 Will”). Linich offered the 2011 Will for probate in several submissions ending in May 2017, affirming at the time that “there exists no will, codicil or other testamentary instrument of the decedent later in date” to the instrument she offered for probate. Because Linich did not make the Court aware of the possible existence of a later will, James was not cited in the proceeding, and letters testamentary were issued to Linich. When Linich was unable to induce James to turn over the decedent’s negatives and photographs to her, she brought an action under SCPA 2103 to discover and marshall them in December 2017. Linich’s discovery petition prompted James to file a petition to probate the 2015 Will. Linich’s SCPA 2103 petition was held in abeyance pending resolution of James’ petition for probate and her letters testamentary were limited to restrain her from disposing of estate assets or making distributions. This Court’s January 2021 decision accepted the 2015 Will for probate and ordered the issuance of letters testamentary to James. The letters testamentary issued to Linich were revoked and she was required to file this accounting. Legal fees and disbursements incurred by Linich in the filing of the petition for probate and the discovery proceeding, along with consultations regarding James’ efforts to probate the 2015 Will, are the principal expenses of administration at $34,246.62, plus an estimated $5,000 for this accounting. James objects to the estate’s payment of Linich’s attorney fees, arguing that Linich made “a false suggestion of a material fact” under SCPA 711 [4] when she swore in her petition for probate that she had no information or belief about later testamentary instruments. Reference is also made to SCPA 711(1), which provides for removal of a fiduciary when disqualifying facts emerge after letters are issued. James cites SCPA 2302(3)[a] for the proposition that the legal fees of an unsuccessful proponent will not be paid by the estate if the will was not propounded in good faith. Last, James objects to payment of a $731.76 commission to Linich. The Court has inherent power to vacate its order appointing Linich as executor if it finds she obtained the order by means of a material misrepresentation (State of New York v. Moore, 179 AD3d 1162, 1163 [3d Dept 2020]; see also In re Estate of Robinson, 102 AD 2d 995, 996 [3d Dept 1984] (probate decree vacated when proponent willfully withheld facts contradicting the testimony of attesting witnesses); and CPLR 5015(a)(3). Vacating the decree appointing Linich as executor would deny her the status of fiduciary in her application for payment of legal fees, limiting the scope of compensable legal services to those which are demonstrably beneficial to the administration of the estate (Estate of Graham, 238 AD2d 682, 687 [3d Dept 1997]). This review of legal fees must therefore begin with determining if Linich made a material misrepresentation at the very inception of the proceedings in this Court and, if so, whether the decree appointing her must be vacated. The crucial representation by Linich is found in paragraph 4 of her verified petition for letters testamentary,¹ where she averred: upon information and belief, after a diligent search and inquiry, including a search of any safe deposit box, there exists no will, codicil or other testamentary instrument of the decedent later in date to any of the instruments [offered for probate]. Linich subsequently testified she didn’t know “for certain” that the decedent had executed a later will until James produced the 2015 Will. Yet in the same deposition, she acknowledged that she knew the decedent had been considering replacing the 2011 Will for some time. It had been the topic of dozens of emails among the decedent, Linich and James in the years preceding his death and Linich recalled meeting with attorneys for this purpose in 2013, 2014 and 2015. Linich also admitted that she had e-mailed James multiple times after decedent’s death “asking…if he’s the executor.” James answered that he was. She recalled that she felt angry that James had “got what he wanted in the will.” The Court learned of the possibility of a second, intervening will from the Article 14 testimony of attorney/draftsperson Trataros. When she met with the decedent in July 2015 to discuss his testamentary plans, he told her he had signed a new will only a few months before, in February 2015. He was eager to replace it, Trataros recalled, because he felt it reflected only what his family wanted, not his wishes. It therefore appears that decedent executed two wills later in date than the 2011 Will: a February 2015 will, which retained bequests to Linich and her family, and the will from July 2015, which did not. James also testified to discussing a new will with decedent on many occasions. The decedent told James he informed Linich and her family about his new testamentary plans before he signed the 2015 Will. Later, after the decedent executed the 2015 Will, he told Linich about it in person. When the decedent tried to embrace his niece, she rebuffed him, saying “you’ve lost that privilege.” Clearly wounded, Linich must have known that the new will eliminated the residuary interest she had hoped for. The timing of this conversation coincided with a curtailment of Linich’s weekly visits to the decedent. Last, there are the meetings between Linich and Paula Weber, James’ former fiancee, which took place soon after decedent’s death. James had shared a home with Weber in Ulster County and when their engagement was broken off, he left the house in haste. He left behind many of his business and personal records in storage boxes in the garage. When he returned two weeks later, he found that the boxes had been rummaged through. Many of the records of his transactions with the decedent were missing, as well as a Warhol piece he had purchased from the decedent. In place of some of the missing items, James found “nasty notes…maybe a hundred of them” from his former fiancee. James avoided Paula Weber as he hastily packed up his belongings because, he testified, he “feared for [his] life.” For her part, Weber described her former fiance as a “sociopath.” Before their break-up, she told James she was disturbed by his control over the decedent, threatening that she “had a feeling [she] would eventually be asked about what happened and that [she] would tell the truth (about the 2015 Will).” Weber lost no time in reaching out to Linich after decedent’s death: Linich testified that in two meetings in 2016, Weber “told me the things she had observed [between James and decedent].” Weber gave her many of proponent’s papers at that time and said they might be “helpful” to her in contesting the 2015 Will.² Linich produced one of the James’ notebooks and other papers long after they were demanded in discovery, delivering them just before James’ deposition, to the apparent surprise of her own attorneys. The Court finds that at the time Linich filed her petition for letters testamentary, she was possessed of ample “information and belief” that the decedent signed a will or wills later than the 2011 instrument she offered for probate. She had sent and received dozens of emails to and from the decedent for several years on the subject of making a new will consulting with attorneys; she may have had a meeting with the attorney who drafted decedent’s February 2015 will, which reportedly benefitted her and her family. Linich learned from decedent himself that he had signed a new will and she reacted in a way that made it clear she was deeply pained by his decision. After decedent’s death, Linich learned, this time from James, that he was named as executor under the new will. From Paula Weber she received confirmation that the decedent had actually signed a new will in 2015, allegedly under undue influence from James. All of this information, derived from several sources, was acquired by Linich prior to her submitting her final petition to probate the 2011 Will. The Court finds Linich was possessed of sufficient information to form a belief that decedent had signed a “will, codicil or other testamentary instrument…later in date” to the 2011 Will she offered for probate. Linich’s failure to disclose her belief as to the existence of a later will or wills in her petition for probate was therefore a material misrepresentation. Linich knew that she was withholding material information when she filed for probate; she knew that any later will would likely have denied her an interest in the estate; and she knew that the Court would rely on her misrepresentation in appointing her executor. The Court hereby finds, in the interests of justice, sufficient reason to vacate its decree granting letters testamentary to Linich (Estate of Robinson, 102 AD2d 995-996). No benefits can flow to Linich from her wrongful acts (In re Limberg, 281 NY 463, 466 [1939]), and her application for a commission is therefore denied. The attorney fees Linich incurred during her time as fiduciary will be her personal responsibility unless the Court finds that they benefitted the estate in some way (Estate of Graham, 238 AD2d 682, 687 [3d Dept 1997]). The Surrogate’s Court has broad discretion to fix the reasonable compensation of an attorney who renders services to the estate (Matter of Benware, 121 AD3d 1331 [3d Dept 2014]). In this role, it is recognized as uniquely positioned to allocate the cost of legal services between the parties when services are alleged to benefit both the estate and an interested party or parties (Estate of Graham, 238 AD2d 682, 687 [3d Dept 1997]). The extent of the Surrogate’s power to fix and determine the value of legal services is not unlimited, however: in keeping with the jurisdictional imperative of Estate of Piccione, it is applied only when the legal services are “necessary and beneficial” to the administration of the estate (Estate of Piccione, 57 NY 278 [1982]). Such services may include those which increase the estate’s value, establish kinship or otherwise facilitate its proper administration (Estate of Rodken, 2 AD3d 1008, 1009 [3d Dept 2003]; Matter of Ajala, 117 AD3d 550 [1st Dept 2014]). In the present case, the fees incurred by Linich are not subject to determination by the Court unless they benefitted and are chargeable to the estate. The Court finds that the legal services rendered in probating the 2011 Will were of no benefit to the estate whatsoever. In fact, the probate of the earlier will was against the estate’s interests in that it delayed the production and probate of decedent’s last will and testament. The $7,149 in legal fees and disbursements associated with Linich’s efforts to probate the 2011 Will are thus not chargeable to the estate and shall be removed from Schedule C-1 of the accounting. The services provided to Linich after James offered the 2015 Will for probate were made in contemplation of litigation, which took the form of objections to that will. As a general matter, the legal fees of unsuccessful objectants are not chargeable to the estate unless the person represented was under a disability (SCPA 2302(3)[a]). Here, the services provided to Linich were rendered prior to her filing objections, but in any event could not be said to benefit the estate. The $9,568 in legal fees and disbursements incurred after the 2015 Will was filed are thus not chargeable to the estate and shall be removed from Schedule C-1 of the accounting. The discovery petition filed by Linich, while tainted by her misrepresentation, at least had the benefit of eliciting the production of the will ultimately accepted for probate. Similarly, the present accounting proceeding is required by the Court as a necessary step in the administration of the estate. The Court will therefore confine its determination of the reasonable value of legal services to the discovery and accounting proceedings. The standards to be employed fixing and determining the reasonable value of legal services are enunciated in Matter of Freeman (34 NY2d 1 [1974]) and its progeny. Among them are the complexity of the legal issues involved and the customary fee charged for similar services by the local bar. Contemporary decisions have added to this list the value of the estate assets (In re Estate of McCranor 176 AD2d 1026 [3d Dept 1991]) and the benefit to the estate (Matter of Benware, 121 AD3d 1331 [3d Dept 2014]). Ultimately, any review of legal fees is informed by “the [Court's] own experience in estate matters generally…[which] makes it as qualified as purported experts to accurately assess the value of the services rendered” (In re Guattery, 278 AD2d 738, 739-740 [3d Dept 2000]), citing Matter of Smith, 131 AD2d 913, 915 (3d Dept 1987). The legal services in the discovery proceeding under SCPA 2103 consisted of the drafting, filing and service of a petition. This proceeding had the unintended benefit of bringing about the production of the 2015 Will, which was of considerable benefit to the estate. Since the benefit to the estate in the discovery proceeding was limited to bringing forth the filing of the instrument accepted for probate, the services should be valued on that basis. The Court finds that the reasonable value of drafting, filing and serving a petition to compel production of a will under SCPA 1401 is $2,500. Schedule C-1 of the accounting shall be modified accordingly. The Court does not have jurisdiction to fix or determine the reasonable value of the balance of the fees charged in the SCPA 2103 proceeding because they benefitted Linich personally. The Court finds that the fees sought in this accounting are significantly higher than those charged by the regional bar for similar services (In re Guattery, 278 AD2d at 739-740). Taking into account the fiduciary’s limited tenure, the existence of only two sources of income to receive and deposit, and the $22,000 ultimately marshalled, the Court finds that the fee charged by the local bar for services like these is $3,500. Article C-1 of the accounting shall be amended to reflect this value. Again, the Court lacks jurisdiction to determine the value of legal fees benefitting Linich personally in this accounting and therefore offers no opinion in this regard. The Court hereby finds that the estate benefitted from legal services to Linich in the discovery ($2,500) and accounting ($3,500) proceedings. Any disbursements associated therewith shall be added to the compensation payable. ORDERED, ADJUDGED and DECREED, this Court’s decree dated May 8, 2017 appointing Susan Linich as executor is hereby vacated; and it is further ORDERED, ADJUDGED and DECREED, that Susan Linich shall within 30 days of the notice of entry of this Decision/Order, e-file a bring-down affidavit revising her petition to reflect its terms, together with a proposed Decree approving the settlement of her account; and it is further ORDERED, ADJUDGED and DECREED, that within 10 days of the issuance of the aforesaid Decree, Susan Linich shall turn over to counsel to Dagon James all funds held for the benefit of the estate and all books and records relating to the estate, its assets or its finances received or prepared during the period accounted for, including, without limitation, the items of personal property referred to in Schedule G of the accounting. This constitutes the decision of the Court. All papers, including this Decision/Order, are hereby entered and filed with the Clerk of the Surrogate’s Court. Counsel is not relieved from the applicable provisions of CPLR Section 2220 relating to service and notice of entry. Dated: November 18, 2021